With US President Donald Trump doubling the tariff rate to 50%, India is looking to review its market access offers to America in some sectors. India is conducting a fresh assessment of its market access proposals to the United States, as American trade negotiators prepare to visit later this month, sources told ET. India remains optimistic about finalising the Bilateral Trade Agreement this month, despite US President Donald Trump’s decision to double tariffs, with 21 days remaining before the additional 25% duty takes effect. A US team is scheduled to visit India for trade deal talks between August 25 and August 30. Trump’s 25% additional tariff on India for the latter’s Russia crude oil trade is set to kick in from August 27.
India hopeful of US trade deal – red lines stay
According to the ET report, senior government officials are leading the evaluation of India’s trade deal offer to the US. Instructions have been given to economic ministries to examine their respective sectors and assess potential improvements to India’s offer.
In full swing
However, sources indicate that India maintains its firm stance on agricultural and dairy market access, considering them non-negotiable. Prime Minister Narendra Modi has explicitly stated his commitment to safeguarding the interests of farmers and the dairy sector.The United States is seeking expanded market access for its agricultural products, including corn, soyabean, apples, almonds, ethanol and dairy items. India maintains its resistance to these demands, considering the direct impact on its farming community.Also Read | ‘Worse than Covid’: Donald Trump’s 50% tariffs on India leave exporters troubled; will US move impact China+1 strategy?Nevertheless, authorities are evaluating other sectors to determine potential improvements in market access opportunities, according to sources quoted in the report.
Trump tariffs: Three-pronged strategy to protect exporters
Even as trade deal negotiations are in the works, the government is parallelly developing a three-part approach to mitigate the effects of increased tariffs. “Work is going at a fast pace to bring some relief to exporters,” said an official.Officials indicated that the proposed Export Promotion Mission would include customised schemes to support sectors facing challenges. These initiatives are designed to maintain long-term trade stability.
Indian exports uncompetitive after 50% US tariff
“Another element pertains to diversion of goods to other geographies. Exporters are working on this and the government is examining opportunities to assist this diversion,” said an official. The strategy’s third aspect focuses on identifying sectors experiencing reduced export orders, which could be redirected to fulfil domestic requirements. “This way production will not be impacted and our domestic demand, which is otherwise met through imports, would be taken care of,” the official added.Also Read | Explainer: Donald Trump’s 50% tariffs – will India budge on Russia crude oil trade?
India-US trade deal talks in limbo?
Trump’s latest comments have cast an uncertainty on whether a sixth round of trade deal talks will take place. Trump has dismissed any prospects of trade talks with India, making it conditional upon addressing tariff-related concerns.“No, not until we get it resolved,” Trump said on Thursday at the Oval Office when asked if he anticipates enhanced trade discussions with India.
Major items US imports from India
PM Modi on his part has made it clear that for India the interests of farmers are of great importance.“For us, the interests of our farmers is top priority. India will never compromise on the interests of its farmers, dairy farmers and fishermen. I know I will personally have to pay a heavy price but I am prepared for it,” Modi said.“For the farmers of my country, for the fishermen of my country, for the livestock rearers of my country, Bharat stands ready today,” he said.Also Read | Donald Trump’s 25% additional tariff on India: What are ‘secondary tariffs’ and how do they differ from ‘secondary sanctions’? Explained
